The Marshall Plan Speech

When Secretary of State Marshall accepted an invitation from Harvard University to receive an honorary degree during the first week in June 1947, the State Department informed the president of the Alumni Association that Marshall would make a speech for the afternoon meeting of the Harvard Alumni Association but that Marshall did not want it to be a major speech of the occasion. There were no discussions with representatives of other governments; there were no notifications of the American press that an important speech was to be delivered, and even Harvard President James B. Conant did not expect a major address from General Marshall.

The speech was drafted by Chip Bohlen, a Russia specialist and interpreter who used memoranda from the Director of the Policy Planning Staff George F. Kennan and from Under Secretary of State for Economic Affairs William Clayton. Bohlen especially benefited from Clayton’s graphic oral descriptions of Europe’s situation. In the memorandum he wrote, “Millions of people in the cities are slowly starving,” if the standard of living continued to deteriorate, “there will be revolution.”

On the day of the speech the capacity crowd of 15,000 in Harvard Yard did not expect to see history made but simply to see one of the most admired public servants in America. However when Secretary Marshall began to read his speech there was a recognition that the carefully worded remarks on the political and economic crisis in Europe marked an important event. In that speech, Marshall outlined the need for an economic aid plan to help the devastated nations of Europe and their citizens to recover from the ravages of World War II. When Marshall said, “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace,” the Secretary of State committed the United States to consider a European recovery plan that would be developed by the Europeans and presented to the United States. Thus was launched The Marshall Plan for which George C. Marshall would be awarded the Nobel Peace Prize.

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The speech was not given at the formal June 5 morning commencement exercise but after lunch when the twelve honorary degree recipients made speeches to the graduates, friends, and alumni. The speech was tape-recorded and is available from the Marshall Museum Shop. The following is from the State Department’s handout version of June 4, 1947.

I need not tell you gentlemen that the world situation is very serious. That must be apparent to all intelligent people. I think one difficulty is that the problem is one of such enormous complexity that the very mass of facts presented to the public by press and radio make it exceedingly difficult for the man in the street to reach a clear appraisement of the situation. Furthermore, the people of this country are distant from the troubled areas of the earth and it is hard for them to comprehend the plight and consequent reactions of the long-suffering peoples, and the effect of those reactions on their governments in connection with our efforts to promote peace in the world.

In considering the requirements for the rehabilitation of Europe the physical loss of life, the visible destruction of cities, factories, mines and railroads was correctly estimated, but it has become obvious during recent months that this visible destruction was probably less serious than the dislocation of the entire fabric of European economy. For the past ten years conditions have been highly abnormal. The feverish preparation for war and the more feverish maintenance of the war effort engulfed all aspects of national economies. Machinery has fallen into disrepair or is entirely obsolete. Under the arbitrary and destructive Nazi rule, virtually every possible enterprise was geared into the German war machine. Long-standing commercial ties, private institutions, banks, insurance companies and shipping companies disappeared, through loss of capital, absorption through nationalization or by simple destruction. In many countries, confidence in the local currency has been severely shaken. The breakdown of the business structure of Europe during the war was complete. Recovery has been seriously retarded by the fact that two years after the close of hostilities a peace settlement with Germany and Austria has not been agreed upon. But even given a more prompt solution of these difficult problems, the rehabilitation of the economic structure of Europe quite evidently will require a much longer time and greater effort than had been foreseen.

There is a phase of this matter which is both interesting and serious. The farmer has always produced the foodstuffs to exchange with the city dweller for the other necessities of life. This division of labor is the basis of modern civilization. At the present time it is threatened with breakdown. The town and city industries are not producing adequate goods to exchange with the food-producing farmer. Raw materials and fuel are in short supply. Machinery is lacking or word out. The farmer of the peasant cannot find the goods for sale which he desires to purchase. So the sale of his farm produce for money which he cannot use seems to him an unprofitable transaction. He, therefore, has withdrawn many fields from crop cultivation and is using them for grazing. He feeds more grain to stock and finds for himself and his family an ample supply of food, however short he may be on clothing and the other ordinary gadgets of civilization. Meanwhile people in the cities are short of food and fuel. So the governments are forced to use their foreign money and credits to procure these necessities abroad. This process exhausts funds which are urgently needed for reconstruction. This a very serious situation is rapidly developing which bodes no good for the world. The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down.

The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products–principally from America–are so much greater than her present ability to pay that she must have substantial additional help, or face economic, social and political deterioration of a very grave character.

The remedy lies in breaking the vicious circle and restoring the confidence of the European people in the economic future of their own countries and of Europe as a whole. The manufacturer and the farmer throughout wide areas must be able and willing to exchange their products for currencies the continuing value of which is not open to question.

Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piece-meal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative. Any government that is willing to assist in the task of recovery will find full cooperation, I am sure, on the part of the United States Government. Any government which maneuvers to block the recovery of other countries cannot expect help from us. Furthermore, governments, political parties or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.

It is already evident that, before the United States Government can proceed much further in its efforts to alleviate the situation and help start the European world on its way to recovery, there must be some agreement among the countries of Europe as to the requirements of the situation and the part those countries themselves will take in order to give proper effect to whatever action might be undertaken by this Government. It would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe. The role of this country should consist of friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a number, if not all European nations.

An essential part of any successful action on the part of the United States is an understanding on the part of the people of America of the character of the problem and the remedies to be applied. Political passion and prejudice should have no part. With foresight, and a willingness on the part of our people to face up to the vast responsibility which history has clearly placed upon our country, the difficulties I have outlined can and will be overcome.

This transcription of the Marshall Plan Speech is taken from a recorded tape in the Foundation’s archives. The principal differences between this transcription and the version distributed to the press by the State Department are the opening and the closing paragraphs which Marshall added while delivering his address.

Mr. President, Dr. Conant, members of the board of overseers, ladies and gentlemen, I’m profoundly grateful and touched by the distinction and honor and great compliment accorded me by the authorities of Harvard this morning. I’m overwhelmed, as a matter of fact, and I’m rather fearful of my inability to maintain such a high rating as you’ve been generous enough to accord to me. In these historic and lovely surroundings, this perfect day, and this very wonderful assembly, it is a tremendously impressive thing to an individual in my position.

I need not tell you gentlemen that the world situation is very serious. That must be apparent to all intelligent people. I think one difficulty is that the problem is one of such enormous complexity that the very mass of facts presented to the public by press and radio make it exceedingly difficult for the man in the street to reach a clear appraisement of the situation. Furthermore, the people of this country are distant from the troubled areas of the earth and it is hard for them to comprehend the plight and consequent reactions of the long-suffering peoples, and the effect of those reactions on their governments in connection with our efforts to promote peace in the world.

In considering the requirements for the rehabilitation of Europe the physical loss of life, the visible destruction of cities, factories, mines and railroads was correctly estimated, but it has become obvious during recent months that this visible destruction was probably less serious than the dislocation of the entire fabric of European economy. For the past ten years conditions have been highly abnormal. The feverish preparation for war and the more feverish maintenance of the war effort engulfed all aspects of national economies. Machinery has fallen into disrepair or is entirely obsolete. Under the arbitrary and destructive Nazi rule, virtually every possible enterprise was geared into the German war machine. Long-standing commercial ties, private institutions, banks, insurance companies and shipping companies disappeared, through loss of capital, absorption through nationalization or by simple destruction. In many countries, confidence in the local currency has been severely shaken. The breakdown of the business structure of Europe during the war was complete. Recovery has been seriously retarded by the fact that two years after the close of hostilities a peace settlement with Germany and Austria has not been agreed upon. But even given a more prompt solution of these difficult problems, the rehabilitation of the economic structure of Europe quite evidently will require a much longer time and greater effort than had been foreseen.

There is a phase of this matter which is both interesting and serious. The farmer has always produced the foodstuffs to exchange with the city dweller for the other necessities of life. This division of labor is the basis of modern civilization. At the present time it is threatened with breakdown. The town and city industries are not producing adequate goods to exchange with the food-producing farmer. Raw materials and fuel are in short supply. Machinery is lacking or word out. The farmer of the peasant cannot find the goods for sale which he desires to purchase. So the sale of his farm produce for money which he cannot use seems to him an unprofitable transaction. He, therefore, has withdrawn many fields from crop cultivation and is using them for grazing. He feeds more grain to stock and finds for himself and his family an ample supply of food, however short he may be on clothing and the other ordinary gadgets of civilization. Meanwhile people in the cities are short of food and fuel. So the governments are forced to use their foreign money and credits to procure these necessities abroad. This process exhausts funds which are urgently needed for reconstruction. This a very serious situation is rapidly developing which bodes no good for the world. The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down.

The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products–principally from America–are so much greater than her present ability to pay that she must have substantial additional help, or face economic, social and political deterioration of a very grave character.

The remedy lies in breaking the vicious circle and restoring the confidence of the European people in the economic future of their own countries and of Europe as a whole. The manufacturer and the farmer throughout wide areas must be able and willing to exchange their products for currencies the continuing value of which is not open to question.

Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist. Such assistance, I am convinced, must not be on a piece-meal basis as various crises develop. Any assistance that this Government may render in the future should provide a cure rather than a mere palliative. Any government that is willing to assist in the task of recovery will find full cooperation, I am sure, on the part of the United States Government. Any government which maneuvers to block the recovery of other countries cannot expect help from us. Furthermore, governments, political parties or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.

It is already evident that, before the United States Government can proceed much further in its efforts to alleviate the situation and help start the European world on its way to recovery, there must be some agreement among the countries of Europe as to the requirements of the situation and the part those countries themselves will take in order to give proper effect to whatever action might be undertaken by this Government. It would be neither fitting nor efficacious for this Government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe. The role of this country should consist of friendly aid in the drafting of a European program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a number, if not all European nations.

An essential part of any successful action on the part of the United States is an understanding on the part of the people of America of the character of the problem and the remedies to be applied. Political passion and prejudice should have no part. With foresight, and a willingness on the part of our people to face up to the vast responsibility which history has clearly placed upon our country, the difficulties I have outlined can and will be overcome.

I am sorry that on occasion I have said something publicly in regard to our international situation; I’ve been forced by the necessities of the case to enter into rather technical discussions. But to my mind, it is of vast importance that our people reach some general understanding of what the complications really are, rather than react from a passion or a prejudice or an emotion of the moment. As I said more formally a moment ago, we are remote from the scene of these troubles. It is virtually impossible at this distance merely by reading, or listening, or even seeing photographs or motion pictures, to grasp at all the real significance of the situation. And yet the whole world of the future hangs on a proper judgment. It hangs, I think, to a large extent on the realization of the American people, of just what are the various dominant factors. What are the reactions of the people? What are the justifications of those reactions? What are the sufferings? What is needed? What can best be done? What must be done? Thank you very much.

Drafting the Marshall Plan Speech

Secretary of State Marshall gave Charles E. Bohlen, Soviet expert and Secretary Marshall’s interpreter, copies of William L. Clayton’s “The European Crisis” memorandum and the Policy Planning Staff’s recommendation dealing with the question of aid to western Europe. Bohlen then “prepared the first draft of the address, adding a few thoughts of my own. The speech was reworked by Marshall himself before the final version.” Charles E. Bohlen. The Transformation of American Foreign Policy; (New York: W.W. Norton & Company, 1969), 89.

George F. Kennan, the influential Director of the Policy Planning Staff, delivered a talk, “Problems of U.S. Foreign Policy after Moscow,” at the National War College that he stated “gives a good idea of the way things looked to me at the very moment of the establishment of the Policy Planning Staff.” The May 6, 1947 talk was delivered “two and a half weeks before the Staff’s recommendations were submitted to General Marshall.”

Analysis of the Speech

Results of the Speech

British Foreign Minister Ernest Bevin heard a BBC report on the Marshall’s Harvard speech shortly after it was given; the next day he contacted French Foreign Minister Georges Bidault and arranged for a June 17 conference in Paris to consider the ideas Marshall had put forth. The key issue was to define what was the nature of the economic problem in Europe, what Europe could do about it, and what was needed from the U.S. Many in Congress were displeased with the various socialist schemes in Europe and dubious about any self-perpetuating U.S. government welfare programs. The Europeans wanted to know what the U.S. required of Europe, and the Americans wanted the potential recipients of aid to list their resources for self-help.

Soviet Foreign Minister Molotov was invited to the Paris meetings, and some countries in the Soviet sphere of influence (e.g., Poland and Czechoslovakia) expressed an interest in participating. Molotov walked out on July 2, however, labeling the Marshal Plan American economic imperialism; Soviet-dominated countries quickly fell into line. One scholarly estimate is that the Soviet Union extracted some $14 billion from East Europe between 1948 and 1953.

On July 12, 1947, representatives of sixteen nations (called the CEEC–Committee of European Economic Cooperation) began meeting in Paris to discuss reconstruction. When the Truman administration leaders did not like the recommendations the CEEC initially produced, Marshall sent State Department Policy Planning Staff head George F. Kennan to Paris to tell the CEEC representatives how to make their proposals politically acceptable to a majority in Congress. The CEEC reported on September 12, 1947, that the sixteen nations needed $19.1 billion for the period 1948-51 or disaster would strike Europe. President Truman called a special session of Congress on November 17 to get short-term economic funding for France, Italy, and Austria. On December 19 he submitted to Congress the European Recovery Program bill, requesting $17 billion over the next four years.

Marshall began to concentrate his energies on getting the Economic Cooperation Act (authorizing and funding the ERP) passed after returning from the London Foreign Ministers’ meeting in December 1947. He was the lead-off witness in the Senate hearings on January 8, 1948. Marshall insisted that the ERP would reduce the expansion of Soviet influence without the need to resort to overheated rhetoric.

George C. Marshall’s speeches in support of Marshall Plan authorization and funding:

19 December 1947 to the nation via radio and television on the results of London Foreign Ministers’ Conference: Soviet obstruction re Germany, need to get German issues settled in order for West Europe to recover from the war

12 January 1948 opening statement to the House Foreign Affairs Committee ERP hearings

15 January 1948 to the Pittsburgh Chamber of Commerce

22 January 1948 to the National Cotton Council, Atlanta, Georgia

13 February 1948 to National Farm Institute, Des Moines, Iowa (by telephone from Knoxville, Tennessee, because of bad flying weather)

11 March 1948 to the Federal Council of Churches, Washington Cathedral

28 May 1948 to the General Federation of Women’s Clubs, Portland Oregon

Europe’s communists helped Congress decide. In addition to the specter of their growing power in West European countries (especially Italy and France), in October 1947 the communists issued a manifesto reviving Comintern (later called Cominform), their international organization pledged to destroying world capitalism. In February 1948 the coup that gave the communists control of the government of Czechoslovakia–a country whose 1938 fate was linked to Western appeasement of the insatiable Hitler–undermined the last important congressional opposition to the Marshall Plan.

The vote in favor of authorization for the Economic Cooperation Act of 1948 was: Senate 69-17 (March 13); House, 329-74 (April 2). The bill authorized an appropriation of $5.3 billion for the program’s first twelve months. In his testimonies, Marshall had insisted that the program should be administered by an autonomous agency headed by a single person (i.e., something like Dwight Eisenhower’s 1944-45 Supreme Headquarters Allied Forces Europe). Congress was determined to have an important businessman head the Economic Cooperation Administration that was to implement the Marshall Plan. Paul Hoffman, head of the Studebaker Corporation and a favorite of Vandenberg’s, was chosen. Marshall never interfered with the ECA after Hoffman took command.